People say you play perfectly. If you play long enough, you will win. Is it luck or is it skill . Join me for the story of how one blackjack player took on the casinos in a whole new way. 40 Million People flock to the vegas strip every year but most only get a peek at the spectacle that is las vegas. You need to be a high roller to see it all. Someone like don johnson. Don is a whale, meaning he risks millions at the casinos and makes millions as well. He is a legendary gambler. He won 15 million in one streak. His game is blackjack. He hits the casinos when they can least afford it. When he walks into a club, dancers show off his initials and celebrities pay their respects. The scene is all engineered by the casinos because they want to win his money. I want don to show me how he beats the casinos at their own game. Hi. So nice to meet you. He treats the casino like a battlefield. He studies the industry, its strengths, and its shortcomings. He says you have to start at the beginning. Where are we heading right now . Where all of vegas started. You come here and gamble . More to just play around and have fun. Gamblers often learn to play here because the bets are low and it is relaxed, friendly. The first vegas casinos opened here back in the 1930s. This is history. This is the beginning of what became the vegas strip. This is the famous vegas strip and it lives up to its reputation. Full of possibility and excitement. Two giant companies dominate the strip mgm and caesars. Don played at a caesars property, he walked out the door with 4 million at caesars. They determine they cant make money off people like me. I can accept that. He says hes been barred from caesars for life. Is that because he is too good . We cant nor would we bar you. We will not solicit him with expensive inducements. While he may not offer perks anymore, nearly all the other Big Companies spend hundreds of thousands on him just to get him through the door. If they want you to spend and they know you can spend, they will make it really easy for you to be here. They are catering to highend players which starts before they even think of coming here. They will bring a player from the east coast to las vegas. The mgm property has the mansion which is 29 villas under a climatecontrolled dome. You get to stay for free . Nothing is free. It is factored into the game. I will give you a secret inside baseball on casinos. Jim murren is the ceo of mgm and don is getting perks at every single one of his casinos. Theoretically, we are going to win from you a percentage of the money that you circulate. The house engineers a statistical advantage. On average, you will lose 20 of the money you play. Are there certain games where you have a better edge over the player . The best chance of beating the casino is with baccarat. That is followed by perfect strategy at blackjack, playing straight up craps, and every game in between has a different set of holes. If you play the big wheel that we put in the front of the casino, you dont have much of a chance. My guys will hate me for saying this. If the house wins so predictably, how do casinos keep gamblers coming back . The answer is perks. I can comp you to induce you to come out here. I will give you 80 worth of stuff. The more money spent, the more money casinos make. The whale will lose thousands of dollars. I should be able to give him 80,000 worth of stuff. Even if i fly you from point a to point b, i am probably not burning that much fuel. The margin on the highend the whales is higher. Highrollers generate an estimated 25 of all gaming revenue on the strip. You have to have their length of play. The longer they play, statistically the house will win. Which is why casinos would do just about anything to keep the whales playing. Easy transportation . Yes. A nice room . Alcohol . They will try to customize a package and try to give him what he wants. Don johnson is no ordinary whale because the more he plays, the more he wins. His biggest single night was at the tropicana. Take me back. I beat them big. When i had a 700,000 hand, i won those. It is difficult to lose those big bets. He racked up millions of dollars of chips before management cut him off. It spread through the entire town and then when i woke up later on, i got several phone calls from different casinos. The casinos were calling you to see if you wanted to play at their place . Why not get him to come over here and see if he can lose part of it back or all of it back . But, don rarely loses. He went on to gamble at two more casinos and won another 10 million before he quit. Anybody watching this right now probably thinks you were counting cards. Was there more to it . Monkeys can count cards. Card counting alone will not get you there. I knew i had a better chance of winning than i did of losing so i took advantage of it. People say you do play perfectly. If you have an edge, if you play long enough, you will win. What gave him an edge, he says, was knowing the game, the players, and most importantly, understanding the odds on the casino floor. All of it is math. Just like on wall street. You are trying to find inefficiencies in the way they offer their games and when you find it, you will take advantage of it. He found an inefficiency in the casinos perk system. Sometimes they give away too much. There is a natural collision of interest between the marketing side and the Operations Side of the casinos. The marketing side wants to buy the business and give away as much as possible to get players in. He could resist all the superficial enticements. He realized he could negotiate something far more valuable. They will test you a lot and it is hard. How don johnson turned the perk system to his advantage when we come back. The bellagio. One of the most dazzling casinos on the strip. A lot of people gather right here because this has one of the best views in vegas. You can see pretty much the whole strip. Everything from Caesars Palace all the way down to Treasure Island and, of course, the eiffel tower. Highrollers come here to enjoy one of the most expensive perks in the city. I like this table. Absolutely gorgeous. What makes this table worth 250,000 a night . This red button. Wow. Now i believe it. It costs them 10,000 every time they fire these things off. I just want to keep hitting the button. The casino and its sibling property transformed the vegas strip in the 1990s. They were both designed by one man steve wynn. What it takes to dazzle everybody today is 100 times more ambitious and complex and challenging than before. He is the nemesis of every whale in the strip because he is always inventing new temptations to keep them in the casino. From nightclubs to shows. They are all coming here for the experience . We have trained the public and raised their expectations. A good thing. A good thing for steve wynn because when don johnson is on a winning streak, he goes to the clubs to celebrate. What is it about his properties that are different from Everything Else here . He is a perfectionist. Spare no expense. If they build it, people would come and they do. He went from an unlikely candidate to the most influential casino developer in history. How does an english major from the university of pennsylvania wind up becoming a casino mogul . The question is how does a boy of opportunity take up a life of crime . He was one of the first casino moguls without ties to the mob. His casinos are financed by wall street and inspired by highend hotels. I would go on vacation to the hotel and i would watch the people behave in this place with such joy and happiness. It was utopian and the guy who built the place marched around with his beautiful wife and the only thing i could think of is, it is good to be king. Thats what it looked like to me. He eventually would become king of las vegas but he started out small working with his father. He took over the Golden Nugget casino in the early 1970s. It wasnt until he opened mirage was when he showed off his talents. I think every developer demonstrates what he thinks of the public by the product he creates. If people have discretion and know the difference and will respond to it, then you will do that even if it costs more. That is the key to winning in las vegas. Keep them entertained and gamblers will lose every single one of them. My father was a problem gambler. He just liked the game more than the money. I will go and grab the biggest players in the building. I will ask them why they are risking 50,000 a roll on dice. Why are you doing it . To amuse myself. I like the game. Are you ever worried that you have a problem with gambling . You worry at times. You want to make sure that your mind is sound and it will test you a lot and it is hard. How do you know when to stop . If you are up 1 million, 2 million. What keeps you going to 5. 8 million . They ran out of chips. Don says he wins because as much as he likes the fun, he doesnt like the biggest life out to distract him. He stays focused. A couple of years ago, he noticed something that would give him the ultimate edge. I dont see as many big players as when i did just five years ago. I dont see the big action, not in vegas. I think a lot of it is a result of the economy and i think a lot of the asian players are playing overseas now. All the more reason for casinos to try and woo someone like you and get you into the door. The recession left casinos vulnerable to an attack by a killer whale like him. Are you exploiting weaknesses . Im not doing anything different than what a very smart Hedge Fund Operator would do on wall street. How the struggling Casino Industry provided don johnson with the biggest opportunity of his career when we come back. 4. 25 million in the span of what . Less than 24 hours . Probably around 12 hours. At night, las vegas looks invincible. Fly over the strip at dawn and its secrets are revealed. These steel and concrete skeletons have haunted the city for five years, evidence of the biggest commercial real estate bubble in history and its spectacular implosion. There is an awful lot of pain out here in las vegas. A lot of fear. Jim murren was halfway through building a casino complex the size of a small city when wall street crashed. We had 10,000 construction workers working on site and the banks stopped lending. It was very difficult. More Casino Companies are abandoning casino projects midconstruction. Do you think it has had a lasting change . The recession in las vegas stripped away the scab that was covering that the companies had a capital structure that was reckless and naive. His luxury towers now look out over the ruins of a casino project planned by the boyds. In your entire time in vegas, have you seen anything like 2008 . No, never. The boyds are really nice people. They drank the koolaid a little bit on this development. Many in vegas blame steve wynn saying that it was he who started the commercial real estate bubble. The new strip is like the house that steve built. Before he built his palaces, vegas casinos were nearly impossible to finance. Most were funded by millionaires or the mob and they relied on slot machines for revenue. I understood what to trust and what not to trust and it was not the slot machines. Wynn brought new ambition to vegas targeting players with expensive tastes. They have a pentup demand for the good life. It was having a cadillac and going to las vegas and gambling. And gambling was part of the good life. That is what the swells did. He turned to wall street and offered investors bonds. When he did his masterpiece of the casino, you get to experience it. The company plummeted and mgm seized the opportunity to take over his property. Wynn had gambled and lost. If you want to criticize or find fault with guys like us, it is easy. We are so flawed in many ways. It is a turkey shoot. His first strip casinos started a vegas casino arms race. Suddenly, banks are writing blank checks for anyone willing to tear down an old casino and build one that can compete with steve wynn. The boyds, a vegas family known for building small local casinos, are inspired to tear down the old stardust on the strip. This was all blown up in 2008 to make way for one of the biggest casinos the strip has ever seen. The echelon would cover 88 acres and cost a staggering 4. 8 billion. Three times the cost of the bellagio. I dont know that echelon was the right idea for them. What wouldve been wrong with a brandnew stardust. It was a great name. Something simple it wouldve knocked everybody out. They had to build five hotels. Do you think theres an element of being a gambler yourself in business . When we imploded the stardust and started to build the echelon, we could not see the recession coming. When we shut it down in 2008, we thought we will be down for six months to a year at the most and then we will restart. Nobody predicted what came next, including steve wynn. I had just opened it. If i had benefited from timing, this was payback time. Wham. Hello, december 22, 2008. The bottom of the barrel. Wynn struggled, but mgm was on life support. The company had gambled 9 billion on city center, more than any project in history. You rolled the dice . We were all in. Our stock went from 100 to the banks said, we are done. 2 a share. 1. 81, actually. 1. 81 a share . They felt if we went bankrupt, mgm would not be far behind. If mgm went bankrupt, struggling las vegas was doomed. But, city center opened defiantly in 2009. We raised 23 billion of capital. Where did you get the money . Equity investors that believed in us and the team. Banks that did know us. How do you grow your way out of that . The crash in las vegas sent shockwaves through the entire Casino Industry. By 2009, the fallout was being felt across the country. In Atlantic City, casinos were desperate for quick profit and were willing to offer whales major incentives. Don sees this as his opportunity. Right now, he is no whale, he is just an average blackjack player who needs to improve his game. I dont look at myself as a professional blackjack player. I have only become a shortterm professional blackjack player because they presented a deal that was so good, it was worth playing. How he transformed himself from casual gambler into a killer whale next. Less than two hours from the Atlantic City boardwalk, and over the pennsylvania border, sits the small town of bensalem, the home of the parks casino and don johnson. The casino owns everything on that side. He shocked the gaming industry by winning 15 million at the blackjack table but he had been prepped for this moment. He learned to gamble here in rural pennsylvania, not at the blackjack table, but at the racetrack. He started out as a jockey. It was a different lifetime ago. You are little taller, broader. You mustve been the biggest jockey they had ever seen. His days as a jockey numbered, he found work as a gaming regulator before becoming an employee at the racetrack. You work your way up managing and then you become a ceo of the track and running things for the corporation. I had never really crossed over to the player side that much. He wanted to gamble like the pros. I watched them as a regulator, observed them as an operator, but never actually participated. In 2003, he quit to become a professional horse bettor. He would run sophisticated mathematical equations in an attempt to predict race outcomes. He started playing cards in Atlantic City to relax. I used to play recreationally, not for big money. 25 bets would be 100 bets which would be a huge gamble. He became a regular player over time. Soon, he was betting 15,000 a game. Talk about Atlantic City. How do you walk into casinos here and in a span of four months time get 15 million . They were desperate for business and overpitching the games. Atlantic city casinos, owned by mgm, the boyds, and caesars, began calling don offering 50,000 in free bets to get him into the door. The deals were so good, he said Atlantic City was in worse shape than ever. Vegas has enough Critical Mass and they have a huge convention center. Some fairly Major Properties that can do a lot of Cross Marketing with Different Properties they own around the country now. The Cross Marketing strategy to keep las vegas strong also steals business from Atlantic City. Vegas casinos anxious to grow profits outside of the strip are pitching small casinos all around the country. States are embracing these casinos. I call it a winwin. It will generate hundreds of millions of dollars in revenue. Lets take the first step in gaming this year. New competition means big losses. Since 2006, 16 local casinos have sprung up around Atlantic City. I think they are losing too much of their business now. There is too much competition in surrounding states. It started with delaware. Pennsylvania has put a lot of pressure on them. New york has gaming now. It is a matter of time before Atlantic City will go back to being a beach town. Atlantic city is a very challenged place. What is your take on it . I am concerned. Jim murren, the ceo of mgm. We want to make the city come back. Are you worried there is a lot of saturation in that market . We have to be very targeted. We have to remember Lessons Learned during the recession and not repeat them. Mgms rival caesars have an appetite for building. Ceo gary loveman has built casinos in pennsylvania and maryland that will compete with the companys flagship in Atlantic City. We had so much expansion. In every instance where a state legalizes it and puts pressure on an incumbent state, that is a business problem. He argues regional casinos are necessary because they drive business back to his vegas property. A lot of locals are hopefully loyal to the brand. You have been treated very well in cleveland and now you want to go to las vegas so you have two options. You can be a traditional purchaser online or you can call your cleveland host who is engaged with his or her people and arrange exactly what you want. That is the proposition. It is a proposition that does deliver for vegas and it is part of the reason profits there only declined slightly in the past few years while Atlantic City lost 40 of its revenue. It is why Atlantic Citys casinos were d